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TMI Blog2017 (12) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... Per Amarjit Singh, Judicial Member The assessee has filed the present appeal against the order of the CIT(A) -2, Mumbai, dated 30.07.2015, pertaining to A.Y. 2009-10, confirming the penalty levied by the AO u/s. 271(1)(c) of the I.T.Act. 2. The assessee has raised the following grounds of appeal: . On the facts and in circumstances of the case the learned CIT(A}-2 Thane erred in confirming the Penalty order u/s 271 (1) (c) of I.T. Act,}961 of ₹ 7,92,59,259/-passed by the learned ACIT circle 3 Thane though there was no mens rea or guilty mind which is a vital point in the expression concealment as envisaged in section 271(l)(c) and if there is no guilty mind, no penalty can be levied. Further mere)) because the claim raised by appellant in return of income for bad and doubtful debt u/s. 36(1)(viia) is found to be excess/ not acceptable and restricted to the extent of provision for bad and doubtful debt debited to Profit and Loss account by any stretch of imagination does not tantamount to concealment of income or furnishing incorrect particulars of income. When the claim for bad and doubtful debt is restricted U/s.36 (I) ( Vii)to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly on account of conscious concealment of income or for providing conscious inaccurate particulars and deliberate concealment is still necessary ingredient for imposing penalty u/s 271(l)c) for concealment of income which is not at all in your appellant case 6. Hence the penalty order confirmed by the CIT (A) 2-mane is completely overlooking the material facts, baseless, ignoring law, against principles and natural justice, bad in law since by no stretch of imagination making of an incorrect/excess claim in law and finding of claim is excess according to judicial pronouncement/ judgments not tantamount to furnishing inaccurate particulars or concealment of income. The Appellant, therefore, prays that the impugned penalty order of ACIT circle-3 Thane and confirmed by CIT (A)-2 mane deserved to be quashed in tore. 7. Your appellant craves the right to add, alter, delete and very any or all grounds of appeal as and when the occasion arises. 3 . The brief facts of the case are that the assessment of the assessee completed on 29.12.2011 assessing total income to the tune of ₹ 46,56,16,220/- u/s 143(3) of the Act. During the assessment proceeding it was observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der:- 6. We have considered the rival submission of the parties and have gone through the order of authorities below. We have perused the copy of show-cause notice u/s 274 r.w.s. 271(1)(c) of the Act dated 19.01.2011. The said notice does not contain the reference about the specific charge if it was issued for concealment of particulars of income or for furnishing inaccurate particulars. The ld. AR of the assessee, as we have referred earlier argued that notice was issued without specifying the charge. We find force in the submissions of ld. AR for the assessee, that the notice does not contain any reference about the specific charge, if the same was issued for concealment of income or furnishing inaccurate particulars. The ld. AR of the assessee besides the other relied upon the decision of Hon ble jurisdictional High Court in CIT vs. Samson Perinchary (supra) and the decision of Meherjee Cassinath Holdings P. Ltd. (supra), ( in which one of us is coauthored) In the said decision, the Co-ordinate Bench of this Tribunal made the following observations: 8. We have carefully considered the rival submissions. Sec. 271(1)(c) of the Act empowers the Assessing Officer to imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, reference has been made to the following specific discussion in the order of Hon'ble Supreme Court in the case of Dilip N. Shroff (supra):- 83. It is of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate particulars. Even before us, the learned Additional Solicitor General while placing the order of assessment laid emphasis that he had dealt with both the situations. 84. The impugned order, therefore, suffers from non-application of mind. It was also bound to comply with the principles of natural justice. (See Malabar Industrial Co. Ltd. v. CIT [2000] 2 SCC 718] 9. Factually speaking, the aforesaid plea of assessee is borne out of record and having regard to the parity of reasoning laid down by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra), the notice in the instant case does suffer from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f (supra) and Dharmendra Textile Processors, 306 ITR 277 (SC) deduced as under :- 12. A combined reading of the decision rendered by Hon'ble Bombay High Court in the case of Smt. B Kaushalya and Others (supra) and the decision rendered by Hon'ble Supreme Court in the case of Dilip N Shroff (supra) would make it clear that there should be application of mind on the part of the AO at the time of issuing notice. In the case of Lakhdir Lalji (supra), the AO issued notice u/s 274 for concealment of particulars of income but levied penalty for furnishing inaccurate particulars of income. The Hon'ble Gujarat High Court quashed the penalty since the basis for the penalty proceedings disappeared when it was held that there was no suppression of income. The Hon'ble Kerala High Court has struck down the penalty imposed in the case of N.N.Subramania Iyer Vs. Union of India (supra), when there is no indication in the notice for what contravention the petitioner was called upon to show cause why a penalty should not be imposed. In the instant case, the AO did not specify the charge for which penalty proceedings were initiated and further he has issued a notice meant for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant clause in the notice clearly brings out the diffidence on the part of Assessing Officer and there is no clear and crystallised charge being conveyed to the assessee u/s 271(1)(c), which has to be met by him. As noted by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra), the quasi-criminal proceedings u/s 271(1)(c) of the Act ought to comply with the principles of natural justice, and in the present case, considering the observations of the Assessing Officer in the assessment order alongside his action of non-striking off of the irrelevant clause in the notice shows that the charge being made against the assessee qua Sec. 271(1)(c) of the Act is not firm and, therefore, the proceedings suffer from non-compliance with principles of natural justice inasmuch as the Assessing Officer is himself unsure and assessee is not made aware as to which of the two limbs of Sec. 271(1)(c) of the Act he has to respond. 14. Therefore, in view of the aforesaid discussion, in our view, the notice issued by the Assessing Officer u/s 274 r.w.s. 271(1)(c) of the Act dated 10.12.2010 is untenable as it suffers from the vice of non- application of mind having regard to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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